Why invest in Maker? What are Maker Token investment pros and challenges? Here is everything you need to know about MKR investing.
The Maker protocol is a software program built on the Ethereum blockchain. Its developers sought to address numerous issues that arise with traditional finance. The protocol’s digital asset, Maker, is a governance token that lets users contribute to issues affecting the DAI stablecoin.
Maker holders are entitled to shares in the project, giving them voting rights on the issuance and management of DAI. Consequently, the coin has garnered traction from its use cases, increasing the number of those holding the token and accelerating the success of the DAI project itself.
The Maker platform remains a significant protocol in the decentralized finance (Defi) space. This is because the ecosystem is one of the major projects that rocked the Defi industry early and has remained relevant ever since its launch.
You may be intrigued by the qualities of this project and its prospects. If that’s the case, let’s take you through how to invest in Maker in a simple and completely straightforward manner. This guide will offer you a comprehensive breakdown geared at arming you with all the knowledge you need on making an informed Maker investment.
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- How to Invest in Maker in 5 Easy Steps - Quick Guide
- How Does Investing in Maker Work?
- Why Invest in Maker?
- How to Invest in Maker - Various Options Available
- How to Choose a Platform to Invest in Maker
- How to Invest in Maker Today - Step-by-Step Walkthrough
- How to Invest in Maker - The Bottom Line
How To Invest In Maker (MKR) In 5 Easy Steps
The idea of investing in Maker can be daunting to beginners; however, it is easier than you might think. In fact, the requirements to get started with an MKR token investment are indeed minimal.
To invest in Maker, you will first need to find a trustworthy and regulated broker that supports MKR coin. This will allow you to set up your brokerage account and enable you to start investing in Maker right away.
Learning how to navigate your way in the cryptocurrency world comes easy when you understand the processes. We have provided a summary of all the steps you need to follow to invest in Maker:
Step 1: Choose a cryptocurrency broker to buy Maker from.
Step 2: Set up your investment account with the chosen brokerage.
Step 3: Find Maker on your brokerage platform.
Step 4: Make your Maker investment by entering how much you want to stake on this digital asset.
Step 5: Confirm your investment order, and withdraw the Maker coins you just bought to a secure digital wallet.
Following your purchase, you will need to make a careful consideration of where to store your Maker tokens. This is a consideration that requires some diligence to ensure you’re making the right choice. With that said, you can safely and conveniently keep your Maker tokens in your eToro portfolio until you are ready to sell.
We will discuss storage later. But for now, let us take you through the nitty-gritty of investing in Maker. When you understand how to invest in Maker and all other procedures involved, you’ll be able to navigate your way in minutes.
How Does Investing In Maker (MKR) Work?
Cryptocurrencies like Maker have moved past their early days - whereby many people shied away from the industry. Now, thousands of people invest in cryptocurrencies and even host platforms to discuss the potential of different projects.
When you make the decision to buy a coin, you’re essentially investing. As with all investments, your primary goal is to make a profit. With cryptocurrencies such as Maker, you do this by buying the coin when the price is low and sell when it shoots up. That way, you would have profited from the increase.
But then, things don’t always go as smoothly as that. Cryptocurrencies are highly volatile, meaning the price of Maker may drop today and refuse to go up anytime soon. This means that for the period the price is down, you would be running at a loss if you had bought the coin at a higher value.
Flowing from that, the next question will be to consider the possible factors that can guide you towards a safe investment.
With regard to Maker, there are a number of factors to consider when assessing the coin’s market value. These include the purport of the project, its market trajectory, its position among other coins, and attendant regulations, among others. These factors are prominent in determining the movement of the coin’s price.
- For instance, where investors analyze the coin along the lines of these core metrics, they will likely buy in bulk. This leads to an increase in the value of the coin.
- On the flip side, a negative analysis means that investors will sell off their Maker, meaning a consequential decrease in the coin’s value.
Regardless, with adequate personal research, you can position yourself to mostly be on the good side of the Maker investment market. Having sufficient knowledge will help you make calculated decisions that can bring you impressive returns.
Let’s take the following example for more context:
- As of 1 January 2020, Maker had a price of just over $587 per token.
- Suppose, following your research, you concluded that the coin would increase in value.
- Therefore, you entered the Maker market by investing a sum of $500.
- As of early August 2021, the price of Maker stood at just over $3,450.
- At this latest price, Maker has increased by over 480%, meaning your $500 investment will now be worth $2,400.
In the example above, you kept your investment intact for just about eight months and eventually made a sizable profit. Yet, along the way, there would have been times when the market didn’t go as you desired.
In other words, if you had sold off your Maker tokens when the price temporarily went down, you likely would have run at a loss.
This makes it essential that you thoroughly evaluate a project before you enter into it. You cannot just invest in Maker without a sufficient understanding of the coin’s projections and long-term possibilities. Knowing these things will help you understand whether Maker is worthy of being added to your portfolio.
Why Invest In Maker (MKR)?
A careful study of the cryptocurrency world reveals that decisions should be data-driven. There is a lot of speculation in the market and this, among other factors, drives the price of Maker. Therefore, it’s crucial to consider your investment goals and see how Maker fits into that.
More importantly, you have to consider your financial capacity and readiness. Understand that, as at the time of writing, Maker has a price that stands at just over $3,024.67.
This is quite high when you consider it against many other coins with hugely low prices. Thus, you need to be sure Maker is a good fit for your investment plan and whether you can get enough tokens to maximize returns.
Once you make these data-driven decisions, you are good to go. To help you understand better the things to look out for when making an investment in Maker, we have discussed a few important factors below.
Maker is Solving Transparency Issues
Maker stands out in the market for the protocol’s great regard for utmost transparency. Using smart contracts, the network displaces the role of central third parties in transactions, making it possible for trades to happen without the need to pass through any major body.
For instance, the case with stablecoins like Tether is that users have to trust the stated reserves of the company behind the project, which often means that a third party will have to guarantee this via an audit.
But with Maker, you have no business waiting for any such audits. Maker’s network can be tracked via blockchain technology. Additionally, the company ensures to publish the recordings of meetings to further boost users’ confidence.
Maker Offers Users a Strong Community Stake
As a Maker holder, you get the right to participate in the ecosystem governance. This means your voice matters in making certain key decisions. Community governance gives you more prominence in determining the project’s future.
- For Maker, the decentralized governance system is based on Active Proposal smart contracts.
- With these contracts, users assume more control in contributing towards the protocol’s success.
- Additionally, the contracts operate to ensure that the platform has an impressive transparency level.
The governance scope users have include contributing to the choice of new collaterals, adjusting policies guiding the DAI stablecoin, and the general improvement of the ecosystem.
Since anyone is welcome to own the Maker coin, this means everyone can participate accordingly.
Maker Addresses Deflation
Early Defi protocols faced a lot of deflation issues, with most of them arising from improperly structured policies. When Maker was developed, the founders understood the importance of ensuring a way to balance the issuance of its token and value degradation.
Therefore, Maker leverages a deflationary protocol to keep its value sustainable.
The platform does this by charging a meager interest fee following the closure of every collateralized debt position (CDP) smart contract. From this fee, a portion of it will be burned to ensure a healthy regulation between the demand and supply of Maker.
How To Invest In Maker (MKR) - Various Options Available
Getting into the cryptocurrency world can be exciting, especially if you have read about numerous projects. However, you should not allow this excitement to be the basis for making financial decisions.
The choice you make concerning a project determines your experience accordingly. A bad decision can result in considerable losses, which may be really hurtful to your investment capital.
With that said, one of the first things to note before you invest Maker decision is to choose between a cryptocurrency exchange or broker.
Cryptocurrency exchanges have become commonplace in the market. You can find them in the decentralized or centralized form. Either way, these exchanges allow you to connect with other buyers and sellers to trade digital tokens. That is, if you want to invest in Maker using any such exchange, you will have to do so from another trader.
Are exchanges bad? Not exactly. However, when buying cryptocurrencies like Maker, you want to consider the convenience of the platform and a host of other features. With many of these exchanges, they are not the best at user-friendliness, especially if you’re a beginner.
Often, their interface has a target demographic of experienced cryptocurrency traders, meaning that novices will likely struggle with navigating through the platform.
On the flip side, it’s possible to find exchanges that offer convenience and friendly features, but this often comes at high costs. So, either way, you’re often dispensing with one thing or the other to trade manageably on these exchanges.
In addition, most of these exchanges work on a crypto-to-crypto mechanism, meaning you can only invest in Maker by swapping it for another digital token. As such, you first have to buy an established coin like BNB or BTC, then proceed to swap for Maker.
But even of more concern are unregulated exchanges such as Binance. With exchanges of this nature, your funds do not enjoy complete stability and security due to the absence of adequate regulation. Thus, where the Maker platform suffers a form of a security breach, there’s no safety net for you to fall into.
These concerns make cryptocurrency exchanges generally less preferred to brokers. For instance, licensed brokers hosting Maker tokens offer you higher levels of security, which you don’t enjoy with cryptocurrency exchanges.
Regulated brokers eliminate some of the issues we itemized with cryptocurrency exchanges. By reducing the complexity that comes with a Maker investment, these brokers tend to position themselves as a smarter alternative.
Brokerage platforms such as eToro provide users with a simple user interface that comes with friendly features. Whether you’re a beginner or a cryptocurrency expert, the platform serves you just right.
More so, when you invest in Maker on these platforms, you are able to do so directly with fiat money. Due to the fact that regulated brokers are audited by respected financial authorities, you can buy your desired coin through your preferred deposit method - e.g. a credit/debit card or e-wallet.
For this purpose, you have ASIC performing regulatory duties from Australia, SEC getting things done in the US, the FCA ensuring the same in the UK, the FSA handling Japan, and so on. All these regulators work based on their distinct jurisdictions.
With this regulation intact, a broker cannot act beyond its authority or use investors’ funds arbitrarily. This offers you a certain level of confidence, knowing that your money enjoys some established form of security.
In summary, if you intend to use a cryptocurrency broker for investing in Maker, you have the following to enjoy:
- You enjoy protection from the financial authority regulating the broker. At eToro, for example, the broker is regulated by the FCA, ASIC, and CySEC.
- You can conveniently fund your Maker investment directly through fiat currency.
- With eToro, you get the added advantage of an in-built wallet with impressive security to protect your Maker tokens.
- Brokers generally charge lower fees, and with a platform like eToro, your investments are commission-free.
Overall, it has been established that cryptocurrency brokers edge exchanges in certain areas. From this, it is clear that you have more to gain when you invest in Maker with a broker, especially one like eToro.
Don't Miss: Maker Price Predictions
How To Choose A Platform To Invest In Maker (MKR)
If you have read our guide up to this point, you’d understand why we suggest a cryptocurrency broker over an exchange. The benefits have been highlighted.
However, because we didn’t explain the fundamentals in detail, it might not be comprehensive enough for someone who’s seeking to invest in Maker or any cryptocurrency for the first time. This is especially so when you think about the numerous platforms offering these services out there.
Therefore, to help you make an informed decision when investing in Maker, we have discussed a set of metrics below. Using these metrics to assess brokers will help you choose the right providers from a long list of options.
Regulation and Credibility
Brokers regulated by financial authorities have more to offer you. As discussed earlier, this brings you more protection and stability when investing in Maker. This is essentially why these financial authorities exist.
By regulating brokers, bodies ensure healthy consumer protection and a market characterized by integrity.
To ensure that this continues to remains so, governing bodies generally have set rules to guide the activities of licensed brokers offering Maker tokens.
Some of these are:
- KYC Process: Regulated brokers are often mandated to have users complete this procedure. The Know Your Customer (KYC) process helps to put a face to all names in a bid to deal with anti-money laundering activities.
- Separate Funds Storage: Regulated brokers have the duty to ensure they keep their money and users’ funds seperately. By doing so, users can have access to their money at any point in time.
- Penalties: The essence of regulation is to ensure that brokers face penalties where they default on any duty. As such, there are relevant penalties to be faced in any such case, which serves as a tool to keep the activities of Maker brokers in check.
With the above factors, it becomes clearer the importance of regulatory compliance during your Maker investment. journey
Trading and Related Fees
The fees you get charged across brokers often vary. As such, this forms a significant consideration when choosing a broker to invest in Maker. When you want to access the Maker markets, you should go for a broker with low fees.
But to do that, you’ll need to understand the possible fees they may charge, so here you go:
- Account opening: This is mostly free across all major cryptocurrency brokerage platforms, so you shouldn’t have an issue here.
- Deposits and Withdrawals: Getting charged here often depends on your payment method. For instance, most brokers will charge you a fee if you’re paying through your credit/debit card.
- Commission: This is commonplace when making an investment in Maker tokens. That is, when you purchase Maker, the broker may require that you pay a fee. The same will apply when you sell. In both cases, the fee is often calculated based on your stake.
- Transferring Tokens: Where you have your Maker tokens stored in a separate wallet, getting them to your desired broker might attract a fee.
Again, let’s bring this within a context:
- For instance, let’s say you deposit $1,000 into your account to invest in Maker using your debit/credit card.
- If your broker charges 5% on debit card purchases, that means you’ll incur $50 on that deposit.
- If your broker charges a 2.5% commission to invest in Maker, that’s another $25.
- At the point of selling your Maker tokens, let’s say your investment is now worth $5,000.
- In this case, you’ll also have to calculate the commission on that. For instance, 2.5% will amount to $125. In essence, for this investment lifespan, you’ll pay a total sum of $200.
This sounds good, but what if you can have it better. This is why you should consider a list of brokers because an option like eToro makes trading more cost-effective. On eToro, you don’t have to pay any fee to deposit in USD. The fees only come into play when you pay with another currency - and this stands at just 0.5% nonetheless.
More so, eToro allows you to invest in Maker without paying commission fees. This is in addition to the fact that you’ll be able to store your MKR coins on the platform for free. That way, you can save yourself the stress of transferring the coin and incurring more charges.
Essentially, across your chain of Maker investments, eToro saves you sizable money by making trading seamless and cost-effective.
Minimum Maker Investment and Payment Options
While Maker itself doesn’t set a minimum you can buy, some brokers might. This is often done to regulate their sales. As such, it’s crucial you check whether your chosen broker sets an account minimum, as this may impact your Maker investment, especially if you have a small budget.
You can go for a platform like eToro, which even allows you to invest in Maker from just $25. This is welcoming to many investors, as it means you can start your journey with a small stake.
Furthermore, you have to consider the supported payment options offered by the platform you’re choosing. This is important because it determines how fast your trades can be executed. Concerning this, there are a few payment options, with the fastest being your debit/credit card. Some brokers - like eToro, also allow you to make payment with e-wallets, such as Neteller and Paypal.
Additionally, you have the option of wire transfer. However, you need to understand that this is the slowest option of all. As such, if you’re working at a fast pace when investing in Maker, this is not the best payment method for you.
Storing your Maker and Cashing Out
You may forget to consider the storage of your Maker tokens while making your purchase. This is often a common oversight among many beginners. Now that you know, it is essential to understand how you can go about it.
You can do this in different ways. You can choose a separate wallet to store your Maker tokens, meaning you have to transfer them after buying from the broker. Alternatively, you can use a broker that comes with an in-built wallet.
This second option is the most convenient for you when buying Maker. This is why we suggest buying the coin through eToro. The platform offers you an in-built wallet to store your tokens safely.
How To Invest In Maker (MKR) Today - Step-by-Step Walkthrough
Getting started with buying Maker should be driven by an investment plan. Buying the coin itself takes just a few minutes. But understanding what to do with them and the best way to maximize returns takes in-depth thinking.
You’ll need to formulate your personal strategy. This will help you make the most of your Maker investment over the course of time. Once you have this sorted, you can buy the coin through the following steps:
Step 1: Create your Account
Your first step is to open your account. With most brokers, you can get this done easily. eToro allows you to complete the process within minutes, and all you need to supply are basic personal details.
Step 2: Upload your ID
You cannot fund your account with fiat currency without lifting the anonymity veil. As such, you need to provide a copy of an identity card. You have nothing to worry about, though; the KYC process is a standard procedure used to prevent fraud.
Although the requirements for the process depends on your chosen broker, here are the general steps to get verified at eToro:
- First, you will need to upload a valid ID such as a driver’s license, passport, or national identity card. A valid ID here will be one that’s issued by the government.
- Additionally, you will need to provide a document that verifies your address. Such a document can be your bank statement or utility bill.
Your account will get verified once you submit these documents and they are approved. At eToro, this is done instantly.
Step 3: Fund your Account
Following the process above, you’ll need to make a deposit into your account so you can invest in Maker. You have numerous options to do this, including a debit/credit card, e-wallet, or wire transfer.
Step 4: Search for Maker
Once your money has been safely deposited, you can proceed to buy Maker. To find the coin, simply enter MKR into the provided search box. Or, you’ll also find the coin in the listed cryptocurrencies section under the “Trade Markets” tab.
Step 5: Finalize your Maker Investment
The next thing is to specify the amount of Maker you intend to buy. On eToro, you can invest as little as $25. Once you make your purchase, you can leave your Maker tokens with eToro until you are ready to cash out!
Step 6: Cash Out Your Maker Investment
Your funds become available following a sale. If you’re using eToro, you don’t have to worry about transferring your tokens back to the broker. This is because you sell your Maker tokens on the platform when you’re ready to cash out.
Once you sell, you can withdraw the funds back to the payment method originally you used to purchase Maker.
How To Invest In Maker (MKR) - The Bottom Line
Understanding how to invest in Maker starts by having a plan in place. Although Maker seems like a credible project in the market, you need to factor in the volatile nature of cryptocurrencies. This will ensure you consider all necessary factors before investing in the coin.
More importantly, you won’t have completely learned how to invest in Maker if you don’t know how to choose the right broker. To make things easy for you, we stated that eToro ticks all of the right boxes.
Once you understand these key things, you indeed will appreciate the processes involved when investing in Maker.
Finally, always stay abreast of market updates and relevant news affecting the price of this digital token. This keeps you in the loop and helps you enter and exit the market in the most effective way.
eToro – Best Exchange To Buy Maker
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
Is Maker a good investment in 2022?
Maker continues to move strongly in the market owing to its impressive use cases and its connection with DAI. This makes the coin competitive in the market, meaning it might be a good investment. However, what matters ultimately is whether it fits into your investment plan. Consider your goals and conduct your thorough research before investing in Maker.
What is the highest price of Maker?
Although the price of Maker fluctuates like every other digital asset, the coin hit an all-time high of $6,339 on 03 May 2021.
How much can I invest in Maker?
Your investment strength is based on your financial capacity and strategy. Additionally, your broker may regulate the possible amount you can invest. However, if you trade with eToro, you can invest in Maker from just $25.
How can I store Maker?
You need to store your Maker tokens in a digital wallet. To do this, you’ll transfer from the broker to the external wallet. However, with a broker like eToro, you get an in-built wallet for saving your Maker.
How to invest in Maker?
Your best bet when it comes to investing in Maker is to use a regulated broker. The preferable choice is eToro - as the platform charges 0% in commission.